Wal-Mart Stores Inc is suing Visa Inc for $5 billion, accusing the credit and debit card network of excessively high card swipe fees.
The move comes several months after the retailer opted out of a class action settlement between merchants and Visa and MasterCard Inc., Reuters reported.
The suit was filed Tuesday in the U.S. District Court for the Western District of Arkansas, where Wal-Mart is headquartered.
In December, a federal judge in Brooklyn, N.Y., approved a $5.7 billion class action settlement between merchants and Visa and MasterCard, as c-store retailers well know. Merchants across the U.S. voiced their objections, saying the settlement was inadequate.
Wal-Mart, Amazon.com Inc., and Target Corp. were among those opting out of the monetary components of the settlement in order to have the option to pursue legal damages on their own.
Those businesses complained about a broad litigation release in the settlement, as did the convenience store industry. The release forces all merchants who accepted Visa or MasterCard, and those who will in the future, to give up their right to sue the credit card companies over rules at issue in the case or similar ones they may make in the future.
Wal-Mart, therefore, is seeking damages from price fixing and other antitrust violations that it claims took place between January 1, 2004 and November 27, 2012. In its lawsuit, Wal-Mart further alleges that Visa, in partnership with banks, took steps to prevent retailers from protecting themselves against those swipe fees, eventually hurting sales.
The company alleges that the way Visa set swipe fees violated antitrust regulations and generated more than $350 billion for card issuers over the nearly nine-year period in question, in part at the expense of the retailer and customers, Reuters reported.
“The anticompetitive conduct of Visa and the banks forced Wal-Mart to raise retail prices paid by its customers and/or reduce retail services provided to its customers as a means of offsetting some of the artificially inflated interchange fees,” Wal-Mart noted in court documents, as reported by Reuters. “As a result, Wal-Mart’s retail sales were below what they would have been otherwise.”
The company has not said whether or not it plans to file a suit against Mastercard.